Sanoma Oyj · OMXHEX:SANOMA

Sanoma Oyj — Non-Deal Roadshow (September 2021)

49 slides from Sanoma Oyj's roadshow presentation, September 2021

  1. Slide 1: Two focused and leading businesses poised for further growth

    Two focused and leading businesses poised for further growth Roadshow presentation July-September 2021

  2. Slide 2: Two focused and leading businesses poised for further growth

    Two focused and leading businesses poised for  We continue to grow Sanoma Learning, the leading European K12 learning further growth business  We are the leading cross-media company in Finland and continue our successful digital transformation ​  We have 300-400m€ headroom for M&A and focus on gr

  3. Slide 3: Our two focused and leading businesses in brief

    Our two focused and leading businesses in brief LEARNING MEDIA FINLAND Market leader in European K12 with strong Finland’s leading cross media company digital footprint and benefits of scale 500m€ 19.2% ~13% >20m 563m€ 11.8% ~50% 97% Net sales Oper. EBIT Market share students Net sales Oper. EBIT B2

  4. Slide 4: We accelerated our transformation during 2020

    We accelerated our transformation during 2020 ≈ 800m€ invested More than 400m€ new, highly profitable net sales acquired Four acquisitions Two focused, Regional news Santillana, leading in K12 learning media business provider of K12 leading services in 2019 in Finland learning content businesses Idd

  5. Slide 5: Learning is now contributing close to 70% of Group earnings

    Learning is now contributing close to 70% of Group earnings We have a balanced …B2C more than half of our Learning close to net sales profile with… media sales 70% of earnings Net sales by SBU Group net sales by category, % Operational EBIT excl. PPA by SBU 10% Other 30% Non-print adv ~30% 48% 52% 1

  6. Slide 6: Learning and media have a positive impact on society

    SANOMA SUSTAINABILITY STRATEGY Learning and media have a positive impact on society 1. INCLUSIVE LEARNING 2. SUSTAINABLE MEDIA We develop inclusive learning solutions We provide trusted Finnish journalism and that help all students to reach their inspiring entertainment, now and in the future potent

  7. Slide 7: We are committed to develop sustainability and our reporting

    We are committed to develop sustainability and our reporting AA 1 Low 2.1 CDP Solid ESG rating Highest Quality ESG risk rating Net positive score Reporting on our from MSCI on scale Score in ISS ESG from Sustainalytics on Upright impact climate action with AAA-CCC rating’s Governance (low = below 20

  8. Slide 8: We continue to grow Sanoma Learning with strong focus on K12 learning services

    We continue to grow Sanoma Learning with strong focus on K12 learning services…  We focus on growing our K12 learning services – K12 being primary, secondary and vocational education – Learning services being blended learning content (print & digital), digital platforms for teaching and administrat

  9. Slide 9: We are the leading European player in a highly fragmented market

    … and we are the leading European #1 player in a highly fragmented market #2  European K12 learning services market ‒ Fragmented market of approx. 4-5bn€ ‒ Serving a total of about 75 million students #1 #1  Our annual net sales of around 600m€ #1 represent a market share of only about 13% – Alrea

  10. Slide 10: Strategic levers support our growth ambitions

    Strategic levers support our growth ambitions Our growth levers M&A: enter new geographies 3 in K12 and expand our offering in existing markets 2-5% p.a. organic growth target Increase value per student 2 through extending offerings, Classroom as a Service Grow market share 1 by continuing to win in

  11. Slide 11: Greater integration of products and digital services creates shift towards subscription model

    Greater integration of products and digital services creates shift towards attractive subscription model Greater benefits for all through subscription State of maturity of the various countries  For students: more up-to-date materials, books can be retained, notes in books improves learning impact

  12. Slide 12: We continue to grow our learning business through M&A

    We continue to grow our learning business through M&A M&A headroom  We have a well-developed pipeline and a good momentum for further acquisitions 300-400m€ – Focus on European K12 learning services by 2022 – Both learning content and digital platform businesses – Entering new geographies and expan

  13. Slide 13: Early closing and successful start of integration of Santillana

    Early closing and successful start of integration of Santillana  Acquisition of Santillana, the leading provider of learning materials, primarily textbooks, for primary and secondary education in Spain, was closed Net sales split 2020 K-12 on 31 December 2020 ~90%  Net sales of 106m€ and standalon

  14. Slide 14: Sanoma is the leading media company in Finland successful in its digital transformation

    Sanoma is the leading media company in Finland successful in its digital transformation  Focused media company with scale – Focus: News & feature, entertainment and B2B marketing solutions – Highly synergistic, bolt-on acquisitions could be considered  Increasing share of consumer income and subsc

  15. Slide 15: Subscriptions growing for the fourth year in a row with strong growth in digital

    CASE HELSINGIN SANOMAT Subscriptions growing for the fourth year in a row with strong growth in digital +3% annual growth in HS subscription base  HS total number of subscriptions over 400k 400k  Number of digital-only subscriptions well above 100k, 30% of total subscription base 30% – Already 70%

  16. Slide 16: Digital transformation increases profit contribution per incremental subscriber, but reduces net sales

    Digital transformation increases profit contribution per incremental subscriber, but reduces net sales  Acquiring an additional subscriber Net sales per additional … but profit contribution for digital instead of printed news will subscription1 reduces… increases1 – Generate 50% the net incremental

  17. Slide 17: Our digital transformation is driven by a unique combination of success factors

    Our digital transformation is driven by a unique combination of success factors, shared between businesses Success factors across our units Excellent digital Subscription sales B2C and B2B News & feature customer management and cross-sales of experience to enable easy use different products and buyi

  18. Slide 18: Solid dividend for our shareholders while growing through M&A

    Solid dividend for our shareholders while growing through M&A  A dividend of 0.52€ (2019: 0.50) per share is paid Dividend per share for 2020 € – Representing a total of approx. 85m€  Paid in two parts – 0.26€ on 22 April – 0.26€ in November (record date tbc in October) 60% Dividend policy: 40% Sa

  19. Slide 19: Two focused and leading businesses poised for further growth

    Two focused and leading businesses poised for  We continue to grow Sanoma Learning, the leading European K12 learning further growth business  We are the leading cross-media company in Finland and continue our successful digital transformation ​  We have 300-400m€ headroom for M&A and focus on gr

  20. Slide 20: H1 2021 Financials

    H1 2021 Financials

  21. Slide 21: H1 2021: Strong growth in net sales and operational EBIT in both businesses

    H1 2021: Strong growth in net sales and operational EBIT in both businesses Net sales Comparable net Operational EBIT Free cash Net debt / sales growth excl. PPA flow Adj. EBITDA 513m€ 7% 55m€ -51m€ 3.1 (2020: 434) (2020: -8%) (2020: 46) (2020: -65) (2020: 2.6)  Net sales grew as a result of acquis

  22. Slide 22: Net sales and earnings grew ahead of the high season

    LEARNING H1 2021 Net sales and earnings grew ahead of the high season  Net sales grew to 217m€ (2020: 173) Operational EBIT excl. PPA m€ – Net sales of Santillana added 35m€ (compared to 34m€ in H1 2020) – Comparable growth of 5% driven by higher pre- ordering in the Netherlands and Poland 90  For

  23. Slide 23: Solid net sales growth across the business with good profitability

    MEDIA FINLAND Q2 2021 Solid net sales growth across the business with good profitability  Net sales grew to 154m€ (2020: 131) Operational EBIT excl. PPA – Solid continued growth in subscription sales driven by strong m€ 16.8 % development of Helsingin Sanomat (HS) and Ruutu+  3% growth y-o-y in th

  24. Slide 24: Free cash flow improved

    Free cash flow improved  Free cash flow improved to -51m€ (2020: -65) Free cash flow m€ + Negative free cash flow of divested Media Netherlands 150 in the comparison period + Improved EBITDA and working capital in Media Finland 100 – Seasonally negative cash flow in Learning including the impact of

  25. Slide 25: Leverage seasonally at its peak

    Leverage seasonally at its peak  Net debt / Adj. EBITDA increased to 3.1 (2020: 2.6) Net debt M€  Equity ratio was 32.9% (2020: 34.4%) 3.0 3.1 Long-term target < 3.0 2.8 2.8 2.7  Net financial expenses decreased to -3m€ 2.6 2.6 (2020: -4) in Q2 2021 2.2 2.0 2.0 – The improvement was due to a fore

  26. Slide 26: Outlook for 2021 (unchanged)

    Outlook for 2021 (unchanged)  In 2021, Sanoma expects that the Group’s reported net sales will be 1.2‒1.3bn€ (2020: 1.1 bn€).  The Group’s operational EBIT margin excluding PPA is expected to be 14‒16% (2020: 14.7%).  Regarding the operating environment and its implications for the business and f

  27. Slide 27: Financial reporting in 2021

    Financial reporting in 2021 27 October Q3 2021 Interim Report 27 Roadshow presentation July-September 2021

  28. Slide 28: We raised long-term targets for Learning's profitability and Group's leverage in December

    We raised long-term targets for Learning’s profitability and Group’s leverage in December Updated GROUP target 31 Dec 2020 Net debt / adj. EBITDA below 3.0 2.6 Equity ratio 35-45% 37.4% Increasing dividend Dividend 40-60% 73% of free cash flow LEARNING Updated FY 2020 target Comparable net sales dev

  29. Slide 29: External debt portfolio on 30 June 2021

    External debt portfolio on 30 June 2021 External debt structure 1) Maturity profile 2021–2024 m€, 30 Jun 2021 m€, 30 Jun 2021 1000 16 96 150 800 600 662m€ 1) 400 200 200 200 0 Term loan 2019 Term loan 2020 Bond CPs Other loans 2021 2022 2023 2024 Commited funding Maturity 1) Excl. IFRS 16 liabilitie

  30. Slide 30: Largest shareholders

    Largest shareholders 30 June 2021 Largest shareholders Holding by sector Number of shares 3% 1. Jane and Aatos Erkko Foundation 39,820,286 24.4% 2. Antti Herlin 19,761,800 12.1% 16% 16% Holding Manutas Oy: 12.06% personal: 0.02% 3. Robin Langenskiöld 12,273,371 7.5% 4. Rafaela Seppälä 10,273,370 6.3

  31. Slide 31: Appendix: Learning

    Appendix: Learning

  32. Slide 32: In learning materials, modest market growth expected over the cycle

    In learning materials, modest market growth expected over the cycle  In Poland, fluctuations due to the Value of K12 publishing market* educational reform ending in 2020-2021 120 Spain  In Spain, the LOMLOE reform is 115 Poland Netherlands driving fluctuation in 2022-2024 110  Dutch market will b

  33. Slide 33: Learning: Market leader in European K12 with strong digital footprint

    LEARNING: Market leader in European K12 with strong digital footprint and benefits of scale  Upgrading long-term profitability target to ‘above 23%’ operational EBIT margin excl. PPA  Successfully executing on M&A strategy  Increasing attractiveness due to conversion from single product to subscr

  34. Slide 34: We are a focused European provider of K12 learning products and services

    We are a focused European provider of K12 learning products and services Education K12 Higher Corporate Life-long Pre-school Key market sectors Primary Secondary Vocational education learning learning School infrastructure  ICT and other equipment  Distribution & Maintenance services Learning prod

  35. Slide 35: We have developed as a publisher of learning materials into an integrated provider

    We have developed as a publisher of learning materials into an integrated provider… Commercial contact Learning products Net sales share* Teachers Administrators & services Blended learning content 60% Material distribution 25% Digital platforms for teaching 5% Digital platforms for administration 5

  36. Slide 36: Significant increase in usage on platforms supporting teachers during the corona pandemic

    … with significant increase in usage on platforms supporting teachers during the corona pandemic  Platforms performed well Usage of selected Sanoma Learning platforms in 2020 Magister to deal with increased Key functionalities, indexed to pre-corona period (09 2019 – 02 2020) Itslearning Itslearnin

  37. Slide 37: Sanoma Learning has been successfully built through M&A

    Sanoma Learning has been successfully built through M&A the Netherlands, Belgium, Spain Finland Spain Finland Belgium Sweden the Netherlands Spain 1999 2004 2008 2011 2016 2019 2020 the Netherlands 9 countries Poland De Boeck Belgium Spain 37 Roadshow presentation July-September 2021

  38. Slide 38: Appendix: Media Finland

    * a” Appendix: Media Finland

  39. Slide 39: Media Finland: Leading media company successful in digital transformation

     Leading positions in news & features, entertainment and B2B marketing solutions  Rapidly increasing digital subscriptions  Stable net sales (+/-2%*) and improving profitability (12-14%*) MEDIA FINLAND:  Important role in Finnish society: Leading media company independent journalism and successf

  40. Slide 40: We have leading positions in news & feature, entertainment and B2B marketing solutions

    We have leading positions in news & feature, entertainment and B2B marketing solutions  Sustainable demand  Our strong history and position #1 in domestic,  Proven track record in digital independent journalism News & feature transformation  Increasing consumer revenue #1 in domestic entertainme

  41. Slide 41: In 2020, we continued to implement our digital transformation strategy

    In 2020, we continued to implement our digital transformation strategy Strong digital growth Focus on core business Helsingin Sanomat (HS) 70%  Combined News & Features out of over 400k subscriptions organisation settled in and include a payable digital showing strategic benefits of element (+8% Yo

  42. Slide 42: #1 in Finnish journalism, further strengthened by acquired regional news media

    NEWS & FEATURE #1 in Finnish journalism, further strengthened by acquired regional news media Leading national and regional news media Focus on  Growing digitally active subscription base  Growing daily national reach 42 Roadshow presentation July-September 2021

  43. Slide 43: Integration and synergy capture proceeding to plan

    CASE REGIONAL MEDIA Integration and synergy capture proceeding to plan Background Synergy realization  On 30 April 2020, Sanoma acquired Alma Media’s on track to achieve regional news media business in Finland full run rate net synergies of Deal rationale 13m€ by 2022  Highly synergistic bolt-on a

  44. Slide 44: We have leading positions in our selected areas

    ENTERTAINMENT We have leading positions in our selected areas TV & video Radio & audio Live events Our market positions #1-2 #2 #1 44 Roadshow presentation July-September 2021

  45. Slide 45: Increasingly stronger position also in the SME segment

    B2B MARKETING SOLUTIONS Increasingly stronger position also in the SME segment SME (small and mid-size enterprise) Market share per customer segment* 2020 customers – significant potential to grow  Our market share in SME is relatively low Large customers (~15% vs. over 30% in large customers) >30%

  46. Slide 46: Long-term digital transformation of media continues

    Long-term digital transformation of media continues – corona accelerating digital adoption both in B2C and B2B Finnish media market outlook Market drivers long-term  Consumer willingness to pay for high-quality news, video and audio on a subscription basis is growing +19% +12% +15%  Increasing int

  47. Slide 47: Analyst coverage

    Analyst coverage Carnegie Investment Bank Pia Rosqvist-Heinsalmi +358 9 6187 1232 Danske Markets Equities Panu Laitinmäki +358 10 236 4867 Inderes Petri Gostowski +358 40 821 5982 Kepler Cheuvreux Stefan Billing +46 8 723 51 48 Nordea Sami Sarkamies +358 9 5300 5176 Pohjola Kimmo Stenvall +358 10 25

  48. Slide 48: Disclaimer

    Disclaimer The information above contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or future financial performance, including, but not limited to, expectations regarding market growth and development as well growth and profitability of Sanoma

  49. Slide 49: Please contact our Investor Relations

    Please contact our Investor Relations: Kaisa Uurasmaa, Head of IR & Sustainability M +358 40 560 5601 E kaisa.uurasmaa@sanoma.com ir@sanoma.com www.sanoma.com

Sanoma — Non-Deal Roadshow (September 2021) on 6ix